From Ed Steer:

As I mentioned yesterday, once Monday's rally was capped in the Comex trading session, both gold and silver traded sideways for the rest of the New York session...and then all day Tuesday in the Far East and early London trading. There was a smallish rally in both metals that started in London about an hour or so before the Comex open. Both ran into the proverbial brick wall at precisely 8:30 a.m. Eastern time. Then both metals were taken down stair-step fashion and they closed below their Monday closing price at the end of Globex trading at 5:15 p.m. in New York. Nothing random about these trading patterns.

And it was most obvious in silver. Starting at 8:30 a.m...there were six mini price declines during New York trading yesterday...five during Comex trading and one in electronic trading after the floor trading was over for the day. As I keep saying...no profit-maximizing seller ever sells like this...ever! Here's the silver chart. Tuesday's price action is in red. The gold chart is similar

click to enlarge

Monday's open interest numbers were a surprise...and, in the grand scheme of things, it's hard to read anything into them. Friday's COT will be interesting. Anyway, gold's big rally on Monday produced a decline of 2,331 contracts in open interest...bringing the total to 336,376 contracts. With silver's rally, o.i. rose 1,156 contracts to 96,699. Quite a difference. Tuesday's open interest numbers, when available later this morning, will be interesting as well. Despite the nice move in the gold price on Monday, volume wasn't overly large...81,417 contracts including switches.

In yesterday's Comex Delivery Report, there was a fair amount of activity. This is no surprise, because as I said yesterday, they've only got a few more days to clear the 1,300+ contracts still awaiting delivery. Well, 453 of them were delivered on Tuesday. The big delivery came from The Bank of Nova Scotia [411 contracts]...and the biggest stoppers [acceptors] were JPMorgan [117] and The Bank of Nova Scotia [195]...plus quite a few smaller stoppers as well. There were no deliveries in silver.

Not a lot of other news to report in gold and silver. The GLD and SLV were unchanged...nothing from the U.S. Mint...but there was 459,854 ounces of silver removed from the Comex-approved warehouses yesterday. All of it came from Scotia Mocatta.

There wasn't a lot of hard news yesterday, but I've got three items for you nevertheless. The first is a GATA release prefixed by commentary from secretary treasurer, Chris Powell. It's entitled "ECB sold gold and bought dollars -- but it's not intervention". It's a Reuters story that was posted at Forbes.com. and the link is here.

In a piece in The New York Times on Monday is this story about deflation in the European Union...with an emphasis on Spain. It's a problem that will become more wide-spread as the economic contraction continues. Spain's real estate market has crashed and the unemployment rate is running at 'depression levels'. One can only imagine how bad it will be by the end of 2009...and beyond. I thank Craig McCarty for sending me the story. The article is entitled "Spain's Falling Prices Fuel Deflation Fears in Europe" and the link is here.

Silver analyst Ted Butler offers another commentary this week. This one is entitled "A Blast From The Past"...and no, it has nothing to do with my musical offerings in my Saturday rant. The link is here.

Gold at its 1981 all-time high of $850.00 is dirt cheap in 2009. The best analogy I can give you is to buy a new 2009 Mercedes Benz at 1981 prices. Do you know of anyone who would turn down an offer like that? I don't. Gold is the epitome of value and investing in true value is the only way to protect your future. Gold is going to become money and all the Geithners and Bernankes in the world will not be able to stop that train. If you want to store your wealth, you had better buy gold while it's cheap. - Richard Russell, 19 April 2009

click to enlarge

Yesterday was a yawner in just about every respect. It was just another day off the calendar. I wouldn't read too much into anything that happened on Tuesday. I do note however, as I fire this off to my editor, that gold and silver are showing the usual signs of life as they head into the London open...which is 3:45 a.m. Eastern time. Options expiry in both gold and silver for the May contract is on Friday the 24th. May is not a big delivery month for gold...but it is for silver. First day notice for the May delivery contract is one week from tomorrow...April 30th. The week ahead could prove interesting.

See you on Thursday.

Casey Research correspondent-at-large Ed Steer is a keen observer of the financial scene and a board member of GATA.org.